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Time for Manteca City Council to put up or shut up about affordable housing
Dennis Wyatt
Dennis Wyatt

This is not the first Manteca City Council to be informed the city has been sitting on $825,400 that’s restricted to be used for affordable housing for more than a decade.

It is the first, however, with not one but two members that ran successful campaigns based in part on their knowledge of securing affordable housing. Councilman Jose Nuño works as an administrator for a successful non-profit that creates afford housing. Mayor Ben Cantu worked in the city’s planning department for 30 years where he helped formulate Manteca’s toothless affordable housing policies. In fairness to the mayor, he has been consistently critical for years of previous elected councils for failing to put those policies to work. He also labored on the city’s first and last affordable housing task force nearly 14 years ago that produced a report  outlining action policies the city should pursue for the council at the time that then said it wasn’t needed any longer. The reason they gave: The recession and housing crisis that hit that year eliminated Manteca’s affordable housing problem. We can all see how well that solved the problem.

The $825,400 are the fees — plus subsequent interest from the city on the money they have let sit around declining in purchasing power instead of putting it to use — was voluntarily paid by the builders of several subdivisions for the expressed purpose of pursuing affordable housing. 

In case anyone on the council wants to stop campaigning and instead govern here are a few things they should consider.

First and foremost do not hire a consultant to come up with some great grand scheme for affordable housing. If they do they might as well as save everyone a lot of trouble and order a couple cases of copy paper from Staples, separate it into piles of 125 sheets, print a cover that declares what is inside is the city’s affordable housing plan, distribute the copies, and make sure a couple are stuck on some obscure shelf at city hall to collect the prerequisite dust.

It’s more efficient than hiring a consultant and go through the motions of getting public input, forming citizen committees appointed by the council, tying up staff time, and wasting ink. That’s exactly what the city did with more than $240,000 in development agreement fees essentially levied on the buyers of Heritage Ranch homes in the neighborhood east and south of Joshua Cowell School 18 years ago did for the purpose of working toward getting Manteca a new library facility. So what did the city get for that $240,000? They hired a consultant who worked with a council appointed citizens task force that assessed needs and came up with the framework and basic design to replace the existing library with a two-story 55,000-square-foot library that was projected to cost $20 million and was designed as a modern learning center and not simply a place to warehouse books. And what did that get Manteca? Basically another expensive consultant study to ignore.

The other thing to resist is simply pouring the money into existing “assistance” programs such as to help first-time qualified buyers to secure a mortgage and then say your work is done.

What is needed is a proven yet innovative approach that the city could hold up to the private sector as a demonstration project in a bid to get traction going forward long after the $825,400 in affordable housing fees have been spent. It should also be based on an existing policy outlined in the city’s housing element so elected leaders can resist the inevitable clarion call from bureaucrats about the need to hire a consultant to devise yet another “updated” policy wonk report on what the city can do to secure affordable housing.

The affordable housing approach that the city can pursue as a demonstration project is secondary housing units or so-called granny flats.

The city would need to line up existing homeowners who are interested in having a secondary housing unit built on their lot. Ideally these would be homeowners that would benefit from the additional income rent allow them to stay in their homes or move into the granny flat and rent their existing homes. There are more than a few homeowners in Manteca — especially the elderly — who are getting in a bigger financial squeeze with each passing year. Such an approach would create a smaller affordable unit that would continue to exist as well as make it affordable for an existing resident to stay in their homes.

Those picked would have to have equity in their property to secure a bank loan.

Assuming it will cost $100,000 to build a 600 to 800 square foot granny flat with fees including a loan with 20 percent down plus taxes and insurance would come in at around $600 a month.

The homeowner would have to be able to cover at least the costs to hire someone to do plans and the fees to submit them to the city. If they need help with the down payment this is where the city comes in. The city would agree to loan the down payment money interest free for 30 years which would tack another $60 onto the reoccurring monthly costs of building the granny flat. The money as it is paid would go back into the affordable housing fee account.

Under a certain square footage in California granny flats are exempt from school mitigation fees. The city could also carve out an exception to some of their own fees — such as for major road improvements — but still collect the rest to keep services such as sewer and water whole. As an infill it increases density meaning the city’s cost to provide services per housing unit in set areas decreases.

If a 700-square-foot home is built and it ends up renting for $1,000 — which is now less than the monthly charge for a smaller studio apartment in a second tier apartment complex in Manteca — the homeowner would have up to a $300 positive cash flow out of the gate. It would make it possible for them to stay in their home (again we are typically talking about older homeowners that are often squeezed the hardest due to fixed income) or be able to afford to keep their property up. It would also increase permanent housing that will rent for less than a typical new apartment unit now starting at $1,400 to $1,500 a month in most Manteca complexes.

The city would have to step up to coordinate bringing lenders, homeowners and home designers together. They could contract with a non-profit that has helped build subsidized units in Manteca and elsewhere to administer the program and make it work. Let’s say that costs $325,400 to do over the course of two to four years.

That leaves $500,000 to make interest free loans covering the 20 percent down payment to build a granny flat. Manteca could leverage that affordable housing fee to build up to 50 new homes that will rent below the prevailing market rates.

The beauty is once the funds are depleted, there will be a proven track record that would either encourage non-profits to continue the program or make it do-able for commercial lenders to seek out such projects. The city could even give it direct life by assessing an affordable housing fee on all new construction.

Of course we could just do what every other community that actually tries to do something about affordable housing with programs beyond inclusionary zoning. We can see how well that is happening in California outside of municipalities working to find ways to finance workforce housing complexes that runs into tens of millions of dollars.

We didn’t elected council members to pass the buck to staff to come up with ideas or to hire consultants. We elected them on the premise they were making that the current way of doing things isn’t making any significant progress to create affordable housing that goes beyond building a large apartment complex on average every five years or so.

Simply said it is time to put up or shut up when it comes to affordable housing.